Your Latest Update on Brexit and Its Impact on Business
No matter how many articles you read, it can be difficult to stay up-to-date with the constant stream of complications otherwise known as Brexit. Here is Galvin International’s guide to the latest Brexit developments and their impact on international market expansion.
In December, the UK and EU agreed an outline deal to allow the UK to negotiate a 2-year transition deal. Recently, the exact dates of this transition period were decided upon in a draft agreement: the implementation phase will last from 29 March 2019 to December 2020. This will allow the UK to prepare for the vast and complex implications of leaving the EU, while giving more time to arrange a new trade deal between the UK and EU.
According to the terms of the agreement, the UK will be able to sign trade deals with non-EU countries during the transition period. However, the issue of the Irish border is still unresolved.
The UK has still not agreed what type of relationship it wants with the EU when all is said and done; the ruling Conservative Party appears more and more split between those who want a clean break with the EU and those who want to limit changes in order to protect the UK economy.
Some of the Brexit confusion is beginning to clear, but much of it still remains. The ultimate decision will determine the future of many businesses – and we know this because Brexit is already greatly impacting companies on an international scale. Here’s a selection of recent examples of Brexit-related business developments that stood out to us:
UK businesses may no longer benefit from EU VAT regulations, causing potential cash flow disruption for small- and medium-sized businesses.
The UK is applying to the UN to join a 50-year-old convention to allow its driving licences to be recognised in Europe. This means that the UK will need to abide by other provisions of the convention, covering new regulations for pedestrian crossings, for example.
UK airlines could lose flying rights within the EU, and potentially the rights to fly to the EU and other countries.
The UK will need to amend trade deals with over 50 non-EU countries. Currently it benefits from EU deals with these countries.
While a transition deal has been drafted, its implementation is dependent on its ratification by March 2019. This is not assured, as shown by the Irish border difficulties and the possibility of a Spanish veto over Gibraltar. Thus, the draft offers some clarity for businesses, but it also poses a challenge: companies still must decide if they should enact their contingency plans in case the transition agreement falls through. In the meantime, they continue to face roadblocks and difficulties such as the ones discussed above. In true Brexit fashion, we’ve received a few answers – and now we’re left with more questions.
If you’re still wondering how Brexit will impact your plans to take your business international, our business expansion concierge service can help. Get in touch with the team at Galvin International today for expert advice on how to prepare your company.
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